Senators Rick Scott and Elizabeth Warren are pushing to establish an independent oversight body within the Federal Reserve aimed at ensuring more effective supervision of high officials. Both politicians urged President Jerome Powell to support their proposed legislation that would make the Fed's Inspector General a position appointed by the president requiring Senate confirmation, rather than being selected internally.
In a letter to the Fed, the senators expressed their concern about the existing conflict of interest having the Inspector General overseeing and holding accountable those who hire them. They criticized the previous management of former Inspector General Mark Bialek, claiming he was ineffective in countering corruption and ethical failures at the Federal Reserve.
Rick Scott mentioned that the proposed bill is a response to the lack of accountability demonstrated by the Fed in recent years, accusing Jay Powell's leadership of allowing regulatory failures and unethical practices. For her part, Elizabeth Warren has sought to strengthen the accountability of the central bank following an ethical scandal related to stock trading by high officials.
The legislation is becoming relevant in a context where Powell faces pressures both from President Donald Trump to lower rates and from other senators criticizing the Fed's lack of transparency. Concerns have been raised about the delivery of information to the public and Congress, and there is a possibility that Republican senators may request a subpoena to obtain such data.
